Revitalising rural economics for more inclusive development: Bangladesh perspective

The rural economy 'of Bangladesh is characterised by pre dominance of agriculture, underemployment and an inadequate scope of earning. Incremental increase in pollution inhibits people to be employed 'in the agricultural sector gainfully and justify the need for exploring the diversified sectors offering the employment opportunity. Sixty per cent employment in rural areas is created by the agriculture, forestry and fishery sector which is followed by wholesale and retail trade.

The National Rural Development Policy (NRDP) is formulated to meet the constitutional obligations to develop human resources and bring about positive changes in 'the standard of living of the people who live in the rural areas of Bangladesh and are dependent on the natural resources therein. The NRDP is intended to provide a set of governing principles for guiding all rural development activities.

2. Rural Industries Development:

a. For rural industrialisation in appropriate sectors a conducive environment will be ensured through access to credit and marketing support.

b.    Establishment of agro based food processing factories and sub contracting factories of big factor is will be encouraged in the rural areas.

c.    Establishment of 'handicrafts village' in advantageous locations at private and government initiatives will be encouraged.

d. Necessary finance and government assistance, where necessary, will be provided for rehabilitation, extension and modernization of industries under cooperative initiative.

e. Special assistance, facilities and support will be provided to co operative initiatives for establishment of agro processing and labour-intensive factories in rural areas.

f. Organised, controlled and effective programmes will be initiated to ensure a conducive environment for entrepreneurs interested in setting up small and medium scale industries in rural areas.

3. Rural Capital Flow

and Financing:

a. To ensure the maximum use of capacity of the rural people, necessary capital will be supplied.

With this end in view banking services will be expanded in the rural areas through coordinated efforts of government and non government organizations.

b. Experiences of Bangladesh Rural Development Board (BRDB), Directorate of Cooperatives, Palli Karma Shahayak Foundation (PKSF), Rural Poverty Alleviation Foundation, Social Development Foundation, Government and Non government Organizations will be analyzed and compared with international experiences, and replication of successful micro credit programmes will be expanded.

c. Efforts will be made to promote savings habit of rural people and involve them in economic activities through strengthening systems for rural financial services.

d. Collateral-free loans will be given to the people of special professions and disadvantaged sections of the society on the basis of group security only

e. In case of distributing agricultural loans, effective measures to ensure swift and fair disbursement of loans will be ensured through efficient exercise of the power as given to the Union Parishad (UP) in the concerned section of the National Agricultural Policy.

4. Problems:

Every initiative suffers from various limitations and the nature of problems varies at different stages.

An attempt is made to know the problem before starting an enterprise and it is stated that problems with the arrangement of capital and availability of experienced labour are the most important problems before starting activities. From the start upto one year, the entrepreneurs face problems with the sales on credit, load shedding and marketing the products. In identifying the existing problems of the enterprises, a close ended questionnaire was administered to know the extent of problems in the areas of financing electricity, tools and equipment, marketing, space of the enterprise, transportation, availability of inputs, technical and labour problem, other utilities and related problems. The respondents view that there are some problems related to availability of electricity, equipment and marketing. In other areas, almost all the respondents say that they do not face any problems. The weighted average method is followed for ranking the problems. Identifying the problems as very much and medium, 1 and 5 are allocated.

Case study: One House One Farm.

Bangladesh is a developing country with 6 7% average GDP. It achieved independence in 1971.

Present government has introduced different safety net programs along with specific projects for development specifically in the rural area through utilizing human and economic potential of the society. One House One Farm project is one of the important rural development programs for poverty reduction through ensuring capital formation and skill development of the poor followed by livelihood ( agro farming) which are exclusively their need based economic activities.

2. Background:

Bangladesh is opting for poverty eradication & elimination of inequalities. The key consideration is the eradication of all types of poverty from the society to achieve sustainable and equitable development. Out of 25.35 million rural households 84 per cent households are small farming families (0.05 2.49 acres). They are producing the lion's share i.e. nearly 70% of the agricultural production of the country. The majority of small households or families in Bangladesh are ensuring food production, food security and food safety themselves. So, the best option for Bangladesh is the optimum use of arable land indigenously by smallholder farm families ensuring maximum food production keeping the resources potential for future use. More investment to smallholder and marginal farmers is now the strategic policy of the government. From that viewpoint One 'House One Farm project was taken where the investment is BDT 31620 million i.e. USD 400 million covering 2.43 million small and marginal farm households (with land 0.05  100.00 acres).

3.  Vision & Mission of the project:

Vision:

Poverty alleviation and sustainable development through fund mobilisation and farming.

Mission:

l  Assistance to capital formation of the poor farm families

l  Sharpening their skill by training & motivation

l  Allow them to sit together at courtyard meeting

l  Enable them to take decision independently

l Enabling them to develop need based small family farms

l  Ensure marketing facilities for their product

4.    Major activities:

Major activities under the program are:

Selection of the poor and under-privileged farm families, Formation of cooperatives with 60 small farm families (40 female and 20 male), Involving them in fund mobilization through electronic device i.e. e financial inclusion Enabling the poor farmers for saving BDT 200 (USD 2.50) per household per month and the project provides the same amount BDT 200 (USD 2.50) per month as bonus/incentive. Providing revolving fund of BDT 150,000 (USD 1920) annually to each of the cooperatives. Providing them training in related fields of agriculture and farming. Enabling them to take any decision independently about farming & development sitting in the evening courtyard meeting

5. Criteria for selection of the poor smallholders:

The second strategy/step is the selection of 60 beneficiaries (i.e. the poor family heads) from each village forming Village Development Organization (VDO) i.e. village cooperatives. Out of 60 members 40 would be females & 20 males as per set criteria, of he beneficiaries under the project. The priorities are:

l Women headed poor household i.e. family with 0 50 decimal land.

l Poor household with 0 30 decimal land.

l Poor household with 0 50 decimal land.

l Poor household with 0 100 decimal land in river eroded char& hilly area.

6. Selection Process:

This selection of poor and marginal farm families is being done by a committee (under section 6.1) in an open meeting at village level in presence of all the sectoral people of the community involving the local administration, local government representatives and community representatives. The selection steps are:

a. Respective Tag officer would request UNO, concerned UP chairman and respectable persons of the village to attend such meeting.

b. This Committee in each village would convene a general meeting with all tiers of people including people's representatives and respectable personalities. This committee would also explain the project in details and thus select 60 households (including 40 female headed families) according to priorities.

c. With these selected families Village Development Organization (VDO) would be formed. Interested absentee land owners of the village (maximum 3) and benevolent persons and persons involved in social welfare (maximum 3) could be adviser members and honourable members respectively.

d. If any breach of principle arises regarding selection of beneficiaries the Upazila implementation and supervising Committee would finalize it through discussion according to rules.

e. Selection Committee would arrange a special general meeting with the selected household heads as members. After detailed discussion an Ad hoc Committee of Village Development Organization would be formed that would be finalized through election according to the procedure written in the project manual. Members of the VDOs deliberately choose a chairman either from the members or a benevolent personality of the village willing to be the head of the Village Development Committee. There would be a manager cum accountant and other members who would be selected or elected by the general members according to the instruction of the project manual. Thus a Managing Committee would be formed with 11 members as given below:

Chairman 01

Vice Chairman 02

Accountant / Manager 01

Members 07

7. Participatory fund mobilisation & micro savings instead of microcredit:

The poor farmers are suffering from a number of constraints like shortage of fund, probably the most important problem they need to address. In this project mutual or participatory fund mobilization through micro savings and government grants has been introduced to encourage them in savings and establish ownership to the fund as well. This fund mobilization is done in two major steps: self micro savings followed by government incentives and grants as revolving fund to the organization. Thus the mobilized fund would be their permanent capital and would be used in farming sustainable generation after generation. So, literally this is micro savings with ownership instead of traditional microcredit.

l Micro savings and incentives from government;

l Revolving fund as grant from the government;

l Skill development training programs;

l Livelihood agro farm selection at evening meeting;

l Repayment of the money to the common fund.

8. Significance of the project

The One House One Farm (OHOF) project has been designed exclusively for the poor agro farming families. The theme is that a man is poor because he has no purchasing power (while food and essential commodities are available in the market) i.e. inaccessibility to market due to lack of money. The person has no money because he has no income due to lack of work as livelihood. It is thought that poverty would be alleviated if the real poor would get the opportunity to use their potential ensuring regular work as farming and other livelihood, if possible. The intrinsic philosophy is that sustainable poverty alleviation may be possible when sustainable livelihood through agricultural farming would be ensured without compromising the future resource use. From the above viewpoint the OHOF project has been approved by the government taking it one of the means of poverty alleviation through livelihood security using local resources and family farming. Project people have been instructed to select the poor and form village development organization (VDO), train them up i.e. develop their skill and sharpen their human potential. To ensure their participation in self development and community development the project authority allowed the poor villagers to sit together and find their needs to maintain their livelihood so that individual and community arming activities will be taken by the poor people according to their living pattern (i.e. culture, food habit and environment), expertise and profession. We took initiatives to build their capital through micro savings instead of micro credit; government has been giving monthly incentives to them against their individual weekly/monthly savings. In addition to that the government allotted revolving fund for them which all are grants. So the theme of the government is to:-

- Do the participatory financial or fund mobilization with their ownership

- Do the fund mobilization, if possible, online i.e. e  financial inclusion

- Use the huge human potential in production through transformation of the unskilled and unutilized human resources to skilled assets

- Ensure their participation in farming and development   Let them sit together and allow them to take decision themselves

- Help them in sustainable resource use for enhancing agro production

9. Progress of the project activities:

The project was started in 2010 2011with BDT 11970 million for 9,640 villages that scaled up to 17,300 villages with BDT 14920 million and finally the DPP has been revised on 30 7 13 with BDT 31630 million for 40,527 villages.

10. The project progress up to June 2013 was:

In the meantime 17,300 village development organizations (VDO) were formed along with 1,038,000 households. 114,294 poor people were trained  up on different households and they have developed 6,80,000 mini income generating farms investing BDT 9000 million.

All the achievements in brief are given below:

- Number of beneficiaries (smallholders) selected 1.38 million

- Developed 17,300 Village Development Organizations Savings deposited by the beneficiaries BDT 3550 million

- Bonus given by the project BDT 3550 million

- Grants from the government BDT 6220 million

- Total savings fund or capital formed BDT 13320 million

- Skill development training provided to 114,000 people

- Total investment BDT 9000 million for 680,000 mini family farms

- Income increased BDT 10,921 per household/year

- Number of households under financial e inclusion is 5.00 million

11. e financial inclusion

and online Banking

Project with its principal objective has taken an initiative for e financial inclusion of the poor households, the beneficiaries through electronic management. At present this e-financial inclusion is going on in 51 districts of Bangladesh. The number of e financial inclusion beneficiaries is 7.4 million and the amount of huge money has already been transacted-BDT 7700 million.

To ensure the transparency and easy management online financial transaction has been started under the project that includes the deposition and withdrawal of the money of the poor beneficiaries. Sanction of loan and deposition of the installments are also going online. The specialty is that each and every deposition or withdrawal of money is communicated to the beneficiaries by SMS. In the meantime more than 1,000,000 data of the beneficiaries are inscribed online. All the official correspondents of the project with all the districts and upazila offices have been going online i.e. project is now running without papers; it is practically a paperless green office now.

12. Betel leaf gardening changed the life of Md. Monzila Pramanik:

Monzila Pramanik is a member of One House One Farm Project's Norshinghpur Sarbik Village Development Organization under the Bagmara Upazila of Rajshahi district. He formed the Norshinghpur Sarbik Village Development group comprising 60 poor people of the village with the assistance of One House One Farm Project officials. Regular savings of the members, incentive bonus from the project and post training assistance have been the source of capital of the organization. Taking a loan amount of BDT 10,000/  from the project, he started the betel leaf garden on 10 decimals of land. Over the time, Mr. Monzila achieved the goal of success. Now he earns BDT 3000/  per week i.e. BDT 12000/  per month or BDT 1,44,000/  per year from his betel leaf garden. He can save a considerable amount of money after all expenditures of his family.

So, he became happy with the income. He regularly saves and pays the instalments of loans.

Today, Mr. Monzila leads a happy life with his two daughters and two sons. He bought two calves, some hens and ducks. He has made a nursery beside his house after receiving training on nursery.

He has a sanitary latrine and a tube well at his house. One House One Farm Project made his life full of joy and resourceful.

13.    Suchitra becomes self-reliant by banana cultivation:

Suchitra, a woman from the Darla village of Tala Upozila under Satkhira 'district, first came to know about One House One Farm Project from a local inspector of Bangladesh Rural Development Board. She enrolled herself as a member of Darla Village Development Organisation and continued to remain regularly present at the Uthan Boithaks.

Under the project she got training on social awareness, tree plantation and vegetable cultivation.

She was planning to change the wheel of her life. She made a plan and took a loan amount of BDT 10,000/  from Darla VDO and planted 85 90 banana trees at the outskirts of her house. Now these banana trees are full of fruits each weighing as much as 25 30 kilos. The market price of each bunch of banana is BDT 400 500. It means now she has earned about BDT 40,000. With a part from that she has cultivated egg plants on 10 kathas of land which is expected to fetch her BDT 30,000. She can learn about health care and nutrition in the Uthan Boithaks. Her family members drink safe water from tube well and use sanitary latrines. Now Suchitra is a pioneer in the struggle against poverty.

The writer is former President of Bangladesh Chamber of Industry. This was a Bangladesh country paper submitted by the writer as a Bangladesh Delegate Leader at an international seminar in Taiwan in September, 2015